What is Inventory Turnover?

Inventory turnover is a financial ratio showing how many times a company has sold and replaced inventory during a specific period.

How do you calculate Inventory Turnover?

Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory at Cost.

What is a good inventory turnover ratio for D2C?

For most consumer brands, a ratio of 4 to 6 is healthy. This means you sell through your entire stock 4-6 times a year. Apparel might be higher (6-10), while luxury or high-margin electronics might be lower (2-4).

Why is low inventory turnover bad?

Low turnover indicates overstocking, obsolescence, or deficiencies in the product line or marketing. It ties up cash that could be used for acquisition or product development.

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Inventory Turnover Calculator

Measure inventory efficiency and stock management to optimize your supply chain.

Inventory Turnover Calculator

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